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Sold For Health Reasons |
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Dear Ms. Lank: I read with interest your column yesterday about capital gains exclusion. I wonder what are the other reasons that one might be able to exclude a portion of the capital gains than the ones you mentioned. I bought a townhouse in June of 2004. My wife and I lived in it for six months, more or less, while working on it. We sold it in August of 2005 because of poor health. It appreciated about $25,000. Is there any way that we might not have to pay the full capital gains (We would have to file an amended return, because we already paid both the state and federal taxes)? |
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Consult a CPA or tax lawyer about the IRS's standards for claiming that the sale was mandated by health reasons. I believe a doctor's letter is involved. Because you lived there one-fourth of the required two years, you may be able to claim one-fourth of the $500,000 homesellers tax exclusion, which would more than cover your gain. |
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Edith
Originally published on September 6, 2006 |
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